Joe Montana prepares for largest windfall as a enterprise capitalist forward of GitLab’s $10 billion IPO

Joe Montana received his first Super Bowl as an NFL quarterback in 1982. Virtually 4 a long time later, he is about to get his first IPO as a enterprise capitalist.

Montana, who led the San Francisco 49ers to 4 Tremendous Bowl victories and was inducted into the Nationwide Soccer League Hall of Fame in 2000, has spent the previous six years investing in start-ups by way of his agency, Liquid 2 Ventures. He began with a $28 million fund, and is now closing his third fund that is nearly thrice greater.

One among Liquid 2’s first investments was announced in July 2015, when a code repository referred to as GitLab raised a $1.5 million seed spherical after going by way of the Y Combinator incubator program. GitLab’s valuation on the time was round $12 million, and different contributors within the financing included Khosla Ventures and Ashton Kutcher.

On Thursday, GitLab is set to debut on the Nasdaq with a market cap of virtually $10 billion, based mostly on a $69 share value, the excessive finish of its vary. Montana’s preliminary $100,000 funding, together with some follow-on funding, is price about $42 million at that value.

“We’re all fairly pumped,” Montana, 65, mentioned in an interview this week, whereas vacationing in Italy. “That is going to be a monster for us.”

Whereas well-known athletes dabbling in start-ups has turn out to be a development in Silicon Valley — from NBA stars Stephen Curry and Andre Iguodala to tennis legend Serena Williams — Montana jumped into the sport a lot earlier. Previous to Liquid 2, Montana was concerned with a agency referred to as HRJ, which was based by ex-49ers stars Harris Barton and Ronnie Lott.

HRJ, which invested in different funds quite than straight into firms, collapsed in 2009 and was sued for allegedly failing to fulfill its monetary commitments.

However quite than return to the game that introduced him fame in an government function or as a broadcaster, like so many fellow all-star quarterbacks, Montana caught with investing. This time he took a lot a unique route.

Ron Conway, the Silicon Valley tremendous angel recognized for profitable bets on Google, Facebook and Airbnb, began displaying Montana world wide of early-stage investing, primarily by way of Y Combinator. Montana, together with a rising crop of seed traders and celebrities, would attended Y Combinator Demo Days, the place entrepreneurs present slides of their firms with development that is at all times up and to the best.

“We had been attempting to see what their secret sauce was and who they checked out and what they had been actually in search of in early-stage firms,” Montana mentioned referring to Conway and his staff. “He began taking us there, and we began doing a handful of investments right here and there, after which he talked me into beginning a fund.”

In 2015, Conway was talking to the most recent group of founders within the Y Combinator program, and he invited Montana to attend the occasion. That is the place Montana met GitLab CEO Sid Sijbrandij, a Dutch entrepreneur who had turned an open-source challenge for serving to builders collaborate on code into an organization that was packaging the software program and promoting it to companies.

“We bought collectively, and mentioned, ‘hey this can be a particular man,'” Montana mentioned. “We dedicated that evening.”

GitLab had simply come out of Y Combinator. In his presentation at Demo Day that March, Sijbrandij informed the viewers that his firm had 10 staff together with 800 contributors engaged on the open-source challenge. GitLab was on tempo for annual gross sales of $1 million, he mentioned, and paying prospects included Apple, Cisco, Disney and Microsoft.

GitLab now employs over 1,350 individuals in additional than 65 nations, in keeping with its prospectus. Because it prepares to hit the general public market on Thursday, GitLab’s annualized income is over $230 million. Gross sales within the second quarter jumped 69% to $58.1 million

Nonetheless, as a result of GitLab spends the equal of three-quarters of its income on gross sales and advertising, the corporate recorded a internet lack of $40.2 million within the newest quarter. A lot of the advertising price range is concentrated on increasing its DevOps (the mix of software program growth and IT operations) consumer base.

“To drive new buyer development, we intend to proceed investing in gross sales and advertising, with a deal with changing DIY DevOps inside bigger organizations,” the corporate mentioned within the prospectus.

For Montana, GitLab marks his agency’s first IPO, although he mentioned “now we have 12 or 13 extra unicorns within the portfolio,” referring to start-ups valued at $1 billion or extra. They embody Anduril, the protection expertise firm led by by Oculus co-founder Palmer Luckey, and autonomous automobile testing start-up Applied Intuition.

Montana has three different companions within the agency: Mike Miller, who co-founded Cloudant and bought it to IBM; Michael Ma, who bought a start-up to Google and have become a product supervisor there; and Nate Montana, Joe’s son, who beforehand labored at Twitter.

Montana mentioned he is concerned within the fund on a day-to-day foundation and attends the accomplice conferences each Tuesday. He mentioned his companions, who’re extra skilled in expertise, deal with a lot of the technical diligence and sourcing of offers, whereas he focuses on serving to portfolios with connections in his community.

“Till the pandemic, I used to be nonetheless talking across the nation,” Montana mentioned, including that he did not begin taking a wage till the third fund. “I used to be out talking to firms like SAP, Amex, Visa and a variety of massive companies, like massive insurance coverage corporations right down to Burger King.”

Particular to GitLab, Montana mentioned he linked Sijbrandij early on with a senior government at Visa, when the corporate was seeking to do a cope with the cost processor.

“I am nonetheless listening to pitches, I’m going to pitches and do all that,” Montana mentioned. “However my time is best spent now serving to with connecting these firms as they mature.”

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